Futures slid as much as 2.2% in London after losing 5.1% last week. Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries, plans to boost crude exports to a record this month, the Oil Ministry said.
Russia’s output rose to a post-Soviet high in December, according to preliminary Energy Ministry data. Saudi Arabia will probably offer narrower discounts for crude to Asia for February, according to a Bloomberg survey. Brent slumped 48% last year, the most since the 2008 financial crisis, as Opec resisted calls to cut output amid a battle with US shale producers.
The 12-member group, which supplies about 40% of the world’s crude, pumped above its target for a seventh straight month in December, according to a Bloomberg News survey.
“Rising supply, slowing refinery demand, rising dollar, it is the same factors driving prices,” said Ole Hansen, head of commodity strategy at Copenhagen-based Saxo Bank. “With news from Iraq and Russia about increased supply, then the expectations about the glut just continue to grow.”
Iraq plans to expand crude exports to 3.3m barrels a day this month, Asim Jihad, a spokesman at the Oil Ministry in Baghdad, said. The country exported 2.94m a day in December, the most since the 1980s, he said.
Iraq reached an agreement with its semi-autonomous Kurdish region last month over oil exports through Turkey, after years of disagreement on the territory’s right to independently develop its energy resources. The pact allows as much as 550,000 barrels a day from northern Iraq to be shipped to the Mediterranean port of Ceyhan, along a pipeline to the Turkish border operated by the Kurdistan Regional Government.
Russian oil production rose 0.3% in December to a post-Soviet record of 10.667m barrels a day, according to preliminary data published last Friday by CDU-TEK, part of the Energy Ministry.
Saudi Arabia may narrow discounts in its official February crude selling prices to buyers in Asia amid speculation that demand will rise following an almost 50% plunge in benchmark prices, according to 12 of 15 traders and refiners in a Bloomberg News survey. Three respondents forecast price differentials to be unchanged.
The world’s biggest oil exporter offered its Arab Light grade at the biggest discount in at least 14 years for January. Brent will trade at $80 (€67) a barrel this year, down from a earlier estimate of $104, amid increases in global spare capacity and rising inventories, Sanford C. Bernstein said.